Sun seekers are turning to package holidays in Europe as soaring hotel and flight prices revive demand for the all-inclusive deals that had fallen from favour, bolstering the balance sheets of some travel companies. In Mallorca higher holiday costs meant that the spending power of tourists was hit hard. Bars and restaurants have reported a big fall in takings.
The combination of a cost-of-living crisis and disruption from strikes and glitches has added to the appeal of a fixed-price package without unexpected add-on costs and easier redress when things go wrong.
After years of travellers using the internet to compile their own itineraries, travel analysts say a trend of buying a ready-made package that began last year has accelerated this summer, the busiest for travel since the pandemic.
"It's something that you think would have died out back in the seventies," Stuart Hatcher, chief economist at aviation data analysis firm IBA, says. "Since COVID, more people are booking package trips."
Spending on package holidays in Europe - most popular among Britons and Germans - is expected to reach $117 billion this year, up 11% from a year ago and will hit a new peak of $125.9 billion next year, according to Euromonitor.
The fixed upfront costs and value for money are appealing, says Caroline Bremner, Euromonitor senior industry manager for travel." In times of peak inflation, as over the past two years, (packages) enable consumers to budget more efficiently."
Britons on average spend about $450 per capita on these getaways, Euromonitor's figures show, as the package holiday provider negotiates deals with hotels, transport companies and other players to drive down costs.
But even packages will get more expensive, the market research company forecasts. It predicts prices will grow at a compound annual growth rate (CAGR) of 3.5% between 2024 and 2029, faster than before the pandemic when they rose at a pace of about 1.3% from 2014-2019.